Groupon Cancels Roadshow--But Was It Ever Really Scheduled In The First Place?

Groupon today canceled
its IPO roadshow. Funny thing is no one we talked to on Wall
Street could confirm that any meetings with institutional
accounts (mutual funds, hedge funds, etc.) had even been
scheduled.

Scott Sweet of IPO Boutique--which advises both institutional and
individual investors on IPO investments--said that typically
accounts are contacted to get on the roadshow meeting schedule
about two weeks before a roadshow is scheduled to commence. With
Groupon, none of the accounts his firm
regularly talks to had in fact been contacted.

The assumption is that Groupon
cancelled the expected roadshow in order to deal with SEC inquiries regarding a leaked internal memo
in which CEO Andrew Mason took on critics of the company's
business plan, cash position and operating health. Running
afoul of SEC quiet period rules leading up to a
roadshow is not unheard of--one of the reasons cited for Wired pulling its IPO in 1996 was because of an
internal memo written by CEO Louis Rossetto that was issued to
334 Wired employees that like the Groupon
memo derided the company's critics and touted its successes. The
memo ended up circulating among 10,000 subscribers of the online
service of TheWell and
elsewhere on the Net. It was believed that the leak may have
prompted the SEC to
question whether the company had properly observed the pre-IPO
quiet period.

But the Groupon cancellation probably has a lot more to do with
prevailing weak market conditions and the questionable strength
of the offering itself, rather than the SEC. Ten of the last 13
IPOs scheduled to come to market have been cancelled and there
are currently no IPOs with a firm date to price and come public.
Like Wired's IPO before it, the real culprit behind pulling any
roadshow or offering is ultimately a lukewarm reception--either
real or perceived--from Wall Street.